Applying the trade secret label to diversity initiatives is growing in popularity in recent years.
This issue has arisen in the context of public records requests, as companies with government contracts are subject to the Labor Department’s anti-discrimination arm and are required to provide diversity information in the form of EEO-1 reports. Several companies have argued that detailed, government mandated figures on the number of women and people of color they employ is not only confidential but warrants trade secret protection because releasing these numbers to the public would give rival competitors an opportunity to steal the company’s hiring initiatives, recruit its diverse employees away, or be used against it in litigation. Some people have pushed back on this effort, arguing that this is nothing more than a new tactic for companies “to hide gender and race disparities and interfere with the advancement of civil rights law and workplace equity.”
This argument has also arisen in the context of more traditional employment disputes. As discussed in an earlier blog post on this issue, just last year, IBM sued its former chief diversity officer on the basis that she would take confidential data on its diversity initiatives and strategies with her to Microsoft. This case was ultimately settled out of court, meaning courts have yet to weigh in on this issue. Time will tell whether this argument will survive court scrutiny.